InternationalPayment-UniversityofMissouri-St.pptVIP

International Payment Trade Statistics Irrevocable Documentary Commercial Letter of Credit L/C Advised or Confirmed Documentary Letter of Credit Conditional, legal obligation of bank to pay beneficiary Bank places its internationally accepted credit rating before customer’s Eliminates commercial risk Principal Parties to Letter of Credit Applicant importer/buyer/account party Beneficiary exporter/seller Issuing Bank guarantor Correspondent Bank Use a Letter of Credit to Seller when: Credit standing of buyers is uncertain Your ability to absorb risk is low Merchandise is custom